Endowment Corner: WILLS AND BEQUESTS

Wills are the best known and most widely used form of planned giving. They are the foundation for any estate planning. Yet, as important as having a will is, over 70% of the people in this country who could have wills and should have wills do not have them. Dying intestate (without a will) is a guarantee that, upon death, estate taxes and probate costs will be higher, and the property in the estate is distributed in ways never intended or desired by the decedent.

In addition, about 20% of the people who die each year do not have any immediate heirs to whom they can leave their estate–no children, grandchildren, spouse, or parents. These people can, and should, name our council and other charitable organizations as beneficiaries. All they need to do so is a little information and encouragement.

A.The Importance of Having a Will

In a sense, everybody has a will. Each state has laws dictating where your property will go after death if you don’t leave any other instructions. Such a will, though, is probably not the will you want. By making the will you want, instead of the will the state wants, you can:

Directly distribute assets to your family, friends, and relatives

Choose the personal representative you want to handle the estate and asset distribution

Avoid excess taxes and costs on the estate

Provide for minor children by establishing a trust, or naming a guardian YOU want

Make charitable gifts to the Cherokee Area Council and other worthy charitable organizations.

B.Property Distributed By Law and Will

Just because you have a will does not mean that everything you own will pass under the will. Some of the things you can control in your will include:

Property held in the name of the donor, such as stocks, real estate, and bank accounts

Tangible personal property, such as cars, jewelry, paintings, etc.

Property you have a power of appointment over

Life insurance proceeds payable to the estate

Other types of property will pass outside of your will, either by contract or other device. The most common will substitutes include:

Jointly held property, including bank accounts

The share of community property that goes to the spouse

Assets held in a trust, such as a charitable unitrust, annuity trust, pooled fund, credit shelter trust, etc.

Property held in a revocable trust

Retirement plans and IRAs

C.Charitable Bequests to the Council

A bequest is a gift of property or cash stated in a will that goes to a person or organization at the death of the testator (the person whose will it is). Donors can place any bequest – including charitable bequests – in a new will when it is made, or they may add it later to an existing will using a codicil (see below). Besides the benefit to the council or charity, a charitable bequest is completely deductible from the donor's estate, likely lowering the estate taxes owed.

There are different types of bequests from which a donor may choose:

1.Specific. The bequest of a specific item, such as a grandfather clock or 100 shares of Disney stock. These are the first things to be distributed from the estate. If the item is no longer in the estate at death, the beneficiary gets nothing.

2.General. A bequest from the general assets of the estate, usually a specific amount of cash. The second group of assets to be distributed from the estate. If the will hasn't been updated for a while, the gift may be smaller than the charity expects and the donor intended.

3.Residual. Leaving all or part of the estate to the council after all of the general and specific bequests have been distributed. If the estate has grown in value, this could be a big gift; otherwise, it's possible the council won't get anything.

4.Contingent. You receive the money or item only upon a condition, such as if the donor's son predeceases him. The chances of the council getting something under a contingency are often small.

5.Percentage. A percentage of the estate, or of an asset in the estate, such as part of a ranch, or 25 percent of the residuary estate. Protects against inflation, and almost always assures the council of receiving something.

D.The Codicil

The codicil is an amendment, change, or addition to an existing will. The advantage of a codicil is that a donor can change his will without having to redraft the entire document. Creating a codicil is common for donors who want to add a charitable bequest for the local council and other charities, or make simple changes. Though the codicil has to be signed and witnessed just like the will itself, they are very short and easy to draft. Many donors are pleased to have an alternative that allows them to make a change to their will without the expense and trouble of completely redoing the will.

Please note: The information in this communication is not legal or tax advice. The BSA Cherokee Area Council # 469 is pleased to offer complimentary gift and estate planning assistance, however, we urge you to seek the advice of a competent professional before implementing any ideas we suggest to you.

Endowment Recognition Awards

The Boy Scouts of America offers three distinct recognition awards.

The James E. West Fellowship Program

James E. West was the first Chief Scout Executive of the Boy Scouts of America, and he served in that position for more than three decades. The West Fellowship award is available for gifts of $1,000 and up in cash or marketable securities to a council endowment fund. The gift must be in addition to – and not replace or diminish – the donor’s annual Friends of Scouting support. Many individuals and corporations make these gifts either on behalf of someone else – such as in honor of an Eagle Scout, Silver Beaver recipient, a retirement, a special accomplishment, or anniversary – or in memory of a special individual.

The 1910 Society

Founded in 1910, the Boy Scouts of America has grown into something larger and more significant than anyone anticipated. We honor that special date by presenting the 1910 Society award to donors who make gifts of $25,000 or more to their council endowments. These gifts can be in the form of cash, securities, land, five-year pledges, or other property suitable for a council endowment fund or easily converted to cash.

There are four levels of recognition in the 1910 Society that honor four very special individuals who shaped modern-day Scouting:

1) Ernest Thompson Seton, nationally known artist and naturalist, author of the first official American Scout handbook and many other books important to Scouting:

Seton Level membership: $25,000 minimum gift

2) Daniel Carter Beard, first chairman of the National Court of Honor; national Scout commissioner, and author of many well-known books and stories for youth;

Beard Level membership: $100,000 minimum gift

3) Theodore Roosevelt, first Chief Scout Citizen, first vice president of the BSA, and president of the United States,

Roosevelt Level membership: $500,000 minimum gift

4) Waite Phillips, one of the BSA’s first benefactors, and donor to the BSA of almost 130,000 acres of land in New Mexico which became Philmont Scout Ranch;

Phillips Level membership: $1,000,000 and up

Phillips Silver Level: $5,000,000 minimum gift

Phillips Gold Level: $10,000,000 minimum gift

The Founders Circle

The Founders Circle, is intended to recognize deferred gifts designated for council endowment funds. Donors are recognized for gift commitments with a minimum value of $100,000. Unlike the other endowment recognition awards, a donor may qualify for membership with gifts made through:

Charitable bequests in a will or codicil

Charitable trusts, such as unitrusts, annuity trusts, and lead trusts

BSA Gift Annuities or BSA Pooled Income Fund gifts

Life insurance/retirement plan designations

Other deferred gifts approved by the local council

As with the 1910 Society, there are four levels of membership within the Founders Circle. They are: